This question is at the core of many official statistics. When we measure growth in the economy, changing population health, life expectancy or prices, we do so because ultimately we want to know how well our society is doing. Is life getting better or worse? How do we compare with other countries? How do we think things will change in the future, and how do we feel about different issues? Yet providing reliable answers to such complex questions brings major challenges in terms of measurement.
Guidelines on producing leading, composite and sentiment indicators released today by UNECE offer national statistical offices (NSOs) a practical guide to producing statistical indicators on trends in society, from economic production cycles to subjective well-being, and from consumer confidence to active ageing.
Composite indicators offer a powerful way of condensing and communicating statistical information about complex, multi-dimensional phenomena such as poverty, human development or quality of employment. Well-known examples include UNDP’s Human Development Index and UNECE’s Active Ageing Index. Leading indicators aim to anticipate something that will happen in the future: the expectations of businesses about upcoming production, orders and sales can be used to predict business developments in the next few months, for instance. Sentiment indicators measure how people feel about things—economic sentiment indicators give us information on the current or future economy, while socio-economic sentiment indicators shed light on things that are notoriously hard to measure or even to define, such as quality of life, happiness, feeling safe or unsafe, trust in government and legal systems, even satisfaction with the living environment.
The new Guidelines help official statisticians to navigate through this huge and growing area, which is becoming increasingly attractive to policymakers and the media but which, until recently, has tended to be seen as outside the scope of official statistics.
As producers of official statistics become ever more aware of the need to meet the demands of all kinds of users, they are seeing the potential of leading, composite and sentiment (LCS) indicators to shed new light on the social and economic development of societies. But there are good reasons why many NSOs have steered clear of these—they have feared that dealing with deeply subjective topics or taking the subjective decisions needed to produce composite indices could harm their credibility. Until now, therefore, these kinds of indicators have most often been produced outside the realm of official statistics—by academics, private companies or international organizations.
The new UNECE Guidelines will help national statistical offices decide whether and how to join the growing trend to produce these indicators, as well as how to communicate the results in a way that showcases the added value offered by official statistics. Since official statistics are produced in accordance with the Fundamental Principles of Official Statistics, which attest to the quality of data sources and the scientific rigour of the techniques applied to them, NSOs can bring quality control and harmonization to a world overrun with compelling and attractive but often statistically questionable indicators, indices and visualization tools.
The new Guidelines are the results of the work of an international Task Force established by the Conference of European Statisticians in 2016, including representatives from Denmark, France, Hungary, Israel, Italy, Mexico, Netherlands, Sweden, Turkey, Eurostat, UNSD and independent experts. They were endorsed in June 2019.
The Guidelines are available at:
Statistical cooperation at UNECE
From economic statistics and population and housing censuses, to pushing the boundaries of official statistics in areas such as climate change, international migration, wellbeing, and new methods like machine learning, UNECE’s work on statistics shapes the way statistics are produced across the world.
This work is performed in close cooperation with over 60 countries under the Conference of European Statisticians (CES).
Cooperation under CES guides international statistical work in the UNECE region and beyond, helping countries to align their priorities, identify new and shared challenges, and work together to address them. It also maximizes resource use and avoids duplication.
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